Thursday, July 7, 2005
Court of Appeal Upholds Assessment for Open Space Acquisition
Divided Sixth District Panel Rejects Jarvis Group’s Challenge Under Proposition 218
By KENNETH OFGANG, Staff Writer/Appellate Courts
The California Constitution, as amended by Proposition 218 in 1996, permits the imposition of a special assessment on property owners for the purpose of acquiring and preserving open space, the Sixth District Court of Appeal ruled yesterday.
A divided panel rejected a challenge by a group of San Jose property owners and the Howard Jarvis Taxpayers Association to a $20 annual assessment narrowly approved in a mail-in vote of property owners in 2001.
The assessment was imposed by the Santa Clara County Open Space Authority, an entity created by the Legislature, on approximately 300,000 property owners within the cities of Campbell, Milpitas, Morgan Hill, Santa Clara and San Jose, as well as much of unincorporated Santa Clara County.
The assessment is supplemental to an earlier assessment of $12 that was upheld by the Court of Appeal in a pre-Proposition 218 case. That assessment has raised about $4 million annually; the authority has been collecting, but not spending, the proceeds of the new assessment pending the Court of Appeal ruling.
Proposition 218, the Right to Vote on Taxes Act, limits the authority of local governments to impose taxes and fees by, among other things, imposing certain election requirements.
The HJTA claims that the authority violated the act by, among other things, imposing an assessment for an impermissible purpose, misleading property owners with regard to the election process, and by failing to adhere to the requirements that an assessment confer a “special benefit” on each property and that the assessment be levied in proportion to the special benefits conferred.
Santa Clara Superior Court Judge William Elfving rejected the challenge two years ago. The appeal drew the attention of a number of groups that filed amicus briefs, including The Trust for Public Land, the San Jose Silicon Valley Chamber of Commerce and the California State Association of Counties on behalf of the authority and the Pacific Legal Foundation on behalf of the opponents.
Justice Eugene Premo, writing yesterday for the Court of Appeal, said the trial judge was correct.
The justice rejected the argument that the authority misled voters into thinking that the assessment would be for only one year rather than “perpetual.” Premo noted that the authority sent out a mailer stating that the measure would create “an ongoing funding source,” that the assessment would be “annual,” and that would be subject to an inflation increase of up to four percent annually without another vote.
Nor, the justice wrote, did the district err in rejecting what the HJTA described as “informal” votes that would have tipped the vote on the measure, which passed with less than 51 percent of the vote, the other way.
During the course of the campaign, opponents of the assessment sent out a mailer urging property owners to vote “no.” Some of these were accompanied by a letter from the Silicon Valley Taxpayers Association saying that use of a preprinted protest form contained in the mailing, which contained no space to vote “yes,” could be used to vote against the assessment.
While some voters may have believed that the forms would be counted as valid ballots, Premo wrote, the authority—whose official ballot and other materials made clear what the process was—was not responsible for that perception.
Premo went on to conclude that Proposition 218 did not, as the plaintiffs, contended, narrow the traditional definition of a special benefit under California law. “Although we do not question that the voters intended Proposition 218 to limit the use of assessments as a source of public funding, we conclude that the law effects that limitation primarily by placing strict procedural requirements upon the creation of assessment districts,” the justice explained.
The benefits identified by the authority—including enhanced access to recreation, environmental protection, new jobs and other enhanced economic activity, reduced public service costs, and enhancement of property values—are special, rather than general, benefits under the traditional standard, the justice said.
“[I]t has long been held that benefits that accrue to residents and other occupants of property may ultimately flow to the property owners and, therefore, may be deemed special benefits,” Premo explained, citing a 1922 Court of Appeal case holding that renovation of a sewer system was a benefit to the land even though it also benefited the people who used the sewers.
Santa Clara Superior Court Judge Brian Walsh, sitting on assignment, concurred in the opinion, but Justice Patricia Bamattre-Manoukian dissented.
The dissenting jurist argued that the nature of the imposition was such that it should be treated as a special tax, rather than an assessment, and thus subject to two-thirds voter approval at a regular election under Proposition 13.
The collection of monies from properties covering a wide swath of the county to fund the annual budget of an agency that has discretion to identify and purchase properties over time is inconsistent with the notion of an assessment, Bamattre-Manoukian argued, because it cannot be determined which property owners will gain a special benefit, nor can the authority calculated the “capital cost” of its project in order to be able to allocate the assessment in proportion to the benefit to each parcel as Proposition 218 requires.
The case is Silicon Valley Taxpayers Assn., Inc. v. Santa Clara County Open Space Authority, H026759.
Copyright 2005, Metropolitan News Company